September 28, 2017 at 2:36 pm #1432
The health of any economy can be gauged by the health and prevalence of small businesses. Start-ups feed the economy in a way that big business cannot. Start-ups increase both innovation and creativity and for years, large businesses were forced to compete with standards set by small businesses in service, quality, and dynamism or fail. Now, there has been a drop off of new start-ups that points to the long-term economic slump.
In 1980, 1 out of 8 businesses were founded in the last year. By 2015, that number had decreased to 1 out of 12. According to the 2015 census, 414,000 businesses were start-ups, a decrease from the 2006 census, which reports 558,000 businesses were small business start-ups.
Start-ups have long been the corner stone of the American Dream. They are often the ladders for the middle class to climb to achieve financial security. The story of how a mom and pop shops overcame the odds to provide a whole family with upward mobility is still told, but since the 1980’s and 1990’s, market power has shifted to favor big business and as a result, it is becoming harder for people to achieve that dream.
The trend towards the disappearance of start-ups started in retail. Mom and pop shops as well as regional brands just couldn’t compete with the prices and convenience of national chains. This downtrend was not that hard felt because start-ups were thriving in other economic sectors nontaxable technology. However, since about 2000, the slow down spread to the technology sector and that was a blow to the economy.
Since start-ups are not creating as many new jobs or fueling dynamism, the economy has been suffering from sluggish wage gains and economic growth. Start-ups like Youtube and Instragram were bought out by the heavy hitters like Google and Facebook. This trend can be seen throughout the small business world, where selling to big business, rather than competing with them, has become the common goal amongst entrepreneurs.
This trend might lead to a huge national emergency since start-ups are the fuel that this country runs on. Small businesses create jobs and drive the market to new and better horizons; and without them, an integral part of America will be lost.
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